RPC profits sharply up 91% to Rs 465 mln

The Richard Peiris Group has recorded a turnover of Rs.4.6 billion for the first quarter ending June 30, up 26% compared to the previous year.

Group operating profits rose by 91% to Rs.465 million during the same period. This comparison is excluding a non recurring capital gain of Rs.232 million arising through the relinquishment of leasehold rights in the Plantation sector during the first quarter of 2006/2007. Plantations, Retail, Plastics and the turnaround of the Tyre Sector contributed positively towards this growth. However profit after tax reduced to Rs. 112 million due mainly to high finance cost. Profits attributable to the equity holders of the parent amounted to Rs.60 million, according to a RPC press release.

The Plastics and Distribution sector continued to record satisfactory performance with an operating profit of Rs.67 million. A new warehouse in Mattegoda and two factories in Horana are expected to be commissioned by November 2008 to augment capacity and to replace the Mattegoda factory that was damaged by fire in October 2006.

The Tyre sector recorded an operating profit of Rs 33 million compared to an operating loss of Rs 16.6 million in the corresponding period of last year. The initiatives to increase turnover, improve margins, reduce overheads and expand the product portfolio, including obtaining the dealership for Birla tyres of India, has contributed positively to improved results.

The Retail sector has continued its steady progress recording an operating profit of Rs. 91 million which was 10% higher than the previous year.

The Plantation sector recorded a successful first quarter reporting an operating profit of Rs.253 million which was a 21% growth over the previous years performance, excluding the non recurring capital gain on the relinquishment of leasehold rights. Favourable rubber and low country tea prices and high contribution from palm oil are driving profitability in this sector.

“The Rubber sector although improved from last year continues to perform below expectations. The sector recorded an operating profit of Rs.23 million compared to a loss of Rs. 53 million in the corresponding period of last year. The rubber mat and shoe soling sheet businesses have turned around, but high rubber prices and wastage levels resulted in the latex foam business recording losses,” the release said.